Arizona Bankruptcy Residency Requirements
Is now the right time to do a bankruptcy filing or should you wait until you move to a new state? If you’re considering a move to Arizona, for example, you’ll need to check the local residency requirements. Understanding these conditions will give you a better idea about your eligibility to do a personal filing.
Arizona Residency Requirements for Personal Bankruptcy Filing
There is a residency requirement in Arizona that prevents individuals who have just moved from completing an immediate filing.
In order to file, you should have lived in Arizona for the greater part of the 180 days preceding the bankruptcy filing.
Apart from this requirement, however, there’s an even more important residency condition that will affect all filings.
This condition applies to bankruptcy exemptions. These are the types of property and assets exempt from liquidation – the stuff you get to keep. In Arizona, both state and federal exemptions apply. To benefit from the Arizona state exemptions, however, you should have been a resident of the state for at least two years.
If you haven’t lived in Arizona continuously for two years, you will be eligible for claiming bankruptcy exemptions from the state where you previously resided. Once again, you should have lived there continuously for at least two years to be eligible for the exemptions.
The Bankruptcy Code provisions apply to debtors that don’t meet the qualification requirements for any of the state-based exemptions.
When to File: Before or After the Move?
As you can see, you don’t have to deal with heavy restrictions in the event of a move from another state to Arizona. You will, however, have to determine the best time for the filing. A comparison will have to be drawn before you initiate the move.
To determine when the right time to file is, you should examine the terms and conditions in the state where you live right now and in Arizona. The property and assets you own and you plan to take with you will also help you decide.
If you’re not 100 percent confident or you don’t understand the regulatory framework, you may want to consult a local bankruptcy attorney and an Arizona lawyer. A legal professional will understand your situation and suggest the filing option that makes the most financial sense.
The bankruptcy exemptions are the most important aspect of the filing that you’ll have to compare. These can differ significantly from state to state. If Arizona state laws allows you to protect more of your property and assets, you may want to postpone the filing.
Things, however, can get a bit complicated, especially if you’re facing dire financial circumstances and you cannot wait.
There’s a generous homestead exemption that, however, is affected by its own set of residency requirements.
In Arizona, the homestead exemption protects 150,000 dollars of equity in a residence that is used primarily for family household purposes. You should have lived in your current Arizona house for at least 3.3 years (1,215 days) in order to claim the homestead exemption. Otherwise, the amount will be reduced.
Hence, your current financial struggles will also affect the filing. In some instances, the waiting period for a successful filing after a move will be several years. For many people who are pressed by circumstances right now, waiting this long is not going to be an option.
In some cases, waiting to file after you move to Arizona can work in your favor. In other instances, you will be better off by doing the filing before you move. To decide, you will have to do a number of calculations. Seizing the best conditions and terms is dependent on doing your preliminary research.
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